FIN 300 Midterm 1 UIUC || A+ Certified.
Real assets in the economy include all but which one of the following?
Land
Buildings
Consumer durables
Common stock correct answers Common Stock
_______ is not a derivative security.
A share of common stock
A call option
A futures contract
A put option correct answers A share of common stock
Active trading in markets and competition among securities analysts helps ensure that:
1. Security prices approach informational efficiency.
2. Riskier securities are priced to offer higher potential returns.
3. Investors are unlikely to be able to consistently find under- or overvalued securities.
1 only
1 and 2 only
2 and 3 only
1, 2, and 3 correct answers 1, 2, and 3
The material wealth of society is determined by the economy's _______, which is a function of
the economy's _______.
,investment bankers; financial assets
investment bankers; real assets
productive capacity; financial assets
productive capacity; real assets correct answers productive capacity; real assets
Which of the following is not a money market security?
U.S. Treasury bill
6-month maturity certificate of deposit
common stock
mortgage backed security correct answers common stock
_______ assets generate net income to the economy, and _______ assets define allocation of
income among investors.
Financial; financial
Financial; real
Real; financial
Real; real correct answers Real; financial
Which of the following are financial assets?
1. Debt securities
2. Equity securities
3. Derivative securities
1 only
,1 and 2 only
2 and 3 only
1, 2, and 3 correct answers 1, 2, and 3
Asset allocation refers to _______.
the allocation of the investment portfolio across broad asset classes
the analysis of the value of securities
the choice of specific assets within each asset class
None of the choices are correct. correct answers the allocation of the investment portfolio across
broad asset classes
Which one of the following best describes the purpose of derivatives markets?
Transferring risk from one party to another.
Investing for a short time period to earn a small rate of return.
Investing for retirement
Earning interest income correct answers Transferring risk from one party to another.
Security selection refers to the _______
allocation of the investment portfolio across broad asset classes
analysis of the broad asset classes
choice of specific securities within each asset class
top-down method of investing correct answers choice of specific securities within each asset
class
_______ is (are) real assets.
, Bonds
Production equipment
Stocks
Life insurance correct answers Production equipment
_______ portfolio construction starts with selecting attractively priced securities.
Bottom-up
Top-down
Upside-down
Side-to-side correct answers Bottom-up
In a market economy, capital resources are primarily allocated by _______.
governments
corporation CEOs
financial markets
investment bankers correct answers financial markets
_______ represents an ownership share in a corporation
A call option
Common stock
A fixed-income security
Preferred stock correct answers Common stock
Real assets in the economy include all but which one of the following?
Land
Buildings
Consumer durables
Common stock correct answers Common Stock
_______ is not a derivative security.
A share of common stock
A call option
A futures contract
A put option correct answers A share of common stock
Active trading in markets and competition among securities analysts helps ensure that:
1. Security prices approach informational efficiency.
2. Riskier securities are priced to offer higher potential returns.
3. Investors are unlikely to be able to consistently find under- or overvalued securities.
1 only
1 and 2 only
2 and 3 only
1, 2, and 3 correct answers 1, 2, and 3
The material wealth of society is determined by the economy's _______, which is a function of
the economy's _______.
,investment bankers; financial assets
investment bankers; real assets
productive capacity; financial assets
productive capacity; real assets correct answers productive capacity; real assets
Which of the following is not a money market security?
U.S. Treasury bill
6-month maturity certificate of deposit
common stock
mortgage backed security correct answers common stock
_______ assets generate net income to the economy, and _______ assets define allocation of
income among investors.
Financial; financial
Financial; real
Real; financial
Real; real correct answers Real; financial
Which of the following are financial assets?
1. Debt securities
2. Equity securities
3. Derivative securities
1 only
,1 and 2 only
2 and 3 only
1, 2, and 3 correct answers 1, 2, and 3
Asset allocation refers to _______.
the allocation of the investment portfolio across broad asset classes
the analysis of the value of securities
the choice of specific assets within each asset class
None of the choices are correct. correct answers the allocation of the investment portfolio across
broad asset classes
Which one of the following best describes the purpose of derivatives markets?
Transferring risk from one party to another.
Investing for a short time period to earn a small rate of return.
Investing for retirement
Earning interest income correct answers Transferring risk from one party to another.
Security selection refers to the _______
allocation of the investment portfolio across broad asset classes
analysis of the broad asset classes
choice of specific securities within each asset class
top-down method of investing correct answers choice of specific securities within each asset
class
_______ is (are) real assets.
, Bonds
Production equipment
Stocks
Life insurance correct answers Production equipment
_______ portfolio construction starts with selecting attractively priced securities.
Bottom-up
Top-down
Upside-down
Side-to-side correct answers Bottom-up
In a market economy, capital resources are primarily allocated by _______.
governments
corporation CEOs
financial markets
investment bankers correct answers financial markets
_______ represents an ownership share in a corporation
A call option
Common stock
A fixed-income security
Preferred stock correct answers Common stock
